Everything’s changed. The monthly wash club subscription has evolved from a simple tactic to gain a predictable revenue stream into a robust tool capable of growing volume, increasing loyalty, and even defending against competition. However, it’s also a sharp tool. It can work either as a scalpel to carve out your unfair share of the market, or like a machete that hacks away at your bottom line. Is your monthly program growing volume, or just washing the same number of cars at a lower ticket average? Is it bringing in new customers, or simply extending discounts to your already loyal base?

DEFINE YOUR STRATEGY

Discounting of any product or service should only be done to achieve a measurable desired outcome. Most business owners do this instinctively. For example, we offer early bird specials or summer detailing promotions to generate traffic during slow periods without thought. Wash clubs, albeit more complex, are a form of discounting, and not exempt from this rule. There are many strategic reasons to offer a wash club membership. A few years ago, I mainly looked at these programs as a way to maximize site utilization. If someone asked my opinion of offering a wash club at a fully utilized property washing 1,000 cars per day at full price, my answer would have been “why discount?” Today, my answer is “it depends on your strategy.” Maybe your strategy is to block competition from expanding into your market or to mitigate the effect of seasonal changes in volume. Or perhaps your strategy is to incentivize customers to buy higher-margin extra services. What we’ve learned with Wash Clubs 2.0 is that they are a flexible tool that can support many strategies depending on your pricing model, which is what we’ll look at next.

PRICE TO SUPPORT YOUR STRATEGY

Before reviewing the new rules of Wash Clubs 2.0 pricing and packages (and there really aren’t any rules), I want to make sure everyone understands the guidelines that have made these programs so successful in the first place. The premise is simple: blow customers away with value in exchange for a larger up front or recurring payment. It works. It’s ingrained into the consumers’ psyche; the more you pay up front, the sweeter the deal you’re going to get. Probably the most popular program is to offer a three-times multiplier for your base memberships. For example, offering “unlimited” $5 washes for $15/month; an “unlimited” $15 top-package wash might be offered for $30/month (a two-times multiplier). The lower the multiplier, the sweeter the deal — and anything 2.25x or below is used for aggressive member acquisition.

Now, what’s new? I’ve seen a lot of modifications recently. Some minor, such as only offering a club plan on the top two to three wash packages and not the “base.” Another potentially revolutionary modification came from a successful exterior location with an $8 base wash which, instead of lowering its base price to compete with a new wash that opened nearby with a much lower $3 base, kept their existing price but offered the $8 package with a $15 “unlimited” wash club option. That’s only a 1.875x multiplier on the base, and they sweeten the deal to a 1.73x multiplier on the top package. This particular wash is a data-driven operation firmly in control of its cost per car, and it will be interesting to see if the move supports their strategy. The remaining Wash Club 2.0 pricing strategies fall into three categories:

The Cable TV Model

Cable companies are famous for introductory pricing models. A car wash of course doesn’t have the luxury of locking its customers into a contract, but that hasn’t stopped many operators from borrowing this pricing strategy to quickly grow wash club membership. I’ve seen some locations sign up hundreds of members during a grand opening, or reopening event, with an introductory offer that gives them a predictable revenue stream right from the start. Variations include offering only the first number of months at the discounted rate before automatically increasing it. Others will grandfather subscribers at the rate they signed up at and gradually increase the price until they’ve reached their target. The last option is to limit the discounted membership to the first x number of subscribers, which provides a powerful call to action.

The Wholesale Club Model

This one is pretty straightforward. An annual or periodic fee entitles customers to perks at the wash. Discounts on the top packages, free towel exchange, and complimentary air fresheners are commonly used. Do careful math before promoting one of these Wash Clubs and test various offers.

Theme Park Model

Some operators are finding customers increasingly reluctant to hand over their credit card information with authorization to bill it month to month. Customers, wanting the wash club value, but hesitant to be billed month to month, have demanded new payment options and savvy operators have been happy to comply. Having lived in Orlando, this latest pricing model reminds me of options theme parks offer for Florida residents. You have the annual pass, the six-month, three-month, or even a one-month pass. However, it’s hard to justify the expense of an RFID tag on a one-month pass to a single car. This brings us to how to limit your unlimited program.

LIMIT UNLIMITED

Let’s be straight. All “unlimited” plans have certain limits: it’s really a matter of the fine print. The current best practice is to only promote the word “unlimited” if the only limit is to a particular vehicle through the use of an RFID tag. Many operators have had tremendous success with this program. Sure, a few bad apples may abuse the program, but the vast majority do not, and as your base grows the effect is negligible more often than not. That said, adding additional limits such as the maximum number of washes per day, week, month, or year is perfectly valid provided you’re up front with the customer.

WORK SMART, NOT HARD

Do not let labor costs and management headaches eat into the predictable revenue and profits of your wash club program. Whether you’ve just begun your research to start a club, or already have thousands of members, you must be on top of the rapidly changing technology. A successful wash club program demands a computer system that lets you, and preferably the customer, insert a credit card and securely set up membership directly into the POS terminal or pay station. Combine the latest technology with the best strategy and your wash club will work as a scalpel to carve out your unfair share of the market instead of a machete that hacks away at your bottom line.

Washing cars for over 30 years, Anthony Analetto serves as president of SONNY’S The CarWash Factory, creator of the Original Xtreme-Xpress Mini-Tunnel, and the largest manufacturer of conveyorized car wash equipment, parts, and supplies in the world. He can be reached at Aanaletto@SonnysDirect.com or at (800) 327-8723 ext. 104.